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The Long-Term Effects Of Short Selling And Negative Activism, Peter Molk, Frank Partnoy
The Long-Term Effects Of Short Selling And Negative Activism, Peter Molk, Frank Partnoy
UF Law Faculty Publications
We investigate the long-term effects of short selling and “negative activism,” where activists seek to profit from declines in the share prices of targeted firms. We show that negative activism is associated with significant and declining long-term share returns and operating performance, as well as an increase in securities litigation and regulatory actions against targeted firms. We explore the policy implications of this new evidence, including ways that policy makers and market participants might take advantage of the potential benefits of short selling negative activism. Our message is straightforward: resist impulses to curb short selling, and instead embrace attempts to …
Institutional Investors As Short Sellers?, Peter Molk, Frank Partnoy
Institutional Investors As Short Sellers?, Peter Molk, Frank Partnoy
UF Law Faculty Publications
Short selling has the potential to improve the efficiency and fairness of equity markets. Yet institutional investors face both private and regulatory constraints to short selling. We document these obstacles and consider the potential benefits of removing them. We advocate that institutional investors engage in more short selling as part of overall net-long equity strategies, such as a leveraged passive equity index combined with an actively managed short position of a size comparable to the amount of leverage.
Fiduciary Exemption For Public Necessity: Shareholder Profit, Public Good, And The Hobson's Choice During A National Crisis, Robert J. Rhee
Fiduciary Exemption For Public Necessity: Shareholder Profit, Public Good, And The Hobson's Choice During A National Crisis, Robert J. Rhee
UF Law Faculty Publications
This Article is written as two discrete, independently accessible topical sections. The first topical section, presented in Part I of this Article, is a case study of Bank of America’s acquisition of Merrill Lynch and the impact of a flawed merger execution on the board’s subsequent decisions. The second topical section, presented Parts II-IV of this Article, advances a theoretical basis for fiduciary exemption during a public crisis. The financial crisis of 2008 was the worst economic disaster since the Great Depression. It nearly resulted in a collapse of the global capital markets. A key event in the history of …
Undressing The Ceo: Disclosing Private, Material Matters Of Public Company Executives, Tom C.W. Lin
Undressing The Ceo: Disclosing Private, Material Matters Of Public Company Executives, Tom C.W. Lin
UF Law Faculty Publications
Disclosing material private matters of public company executives is a difficult and complex but sometimes necessary act. Advocates that favor more disclosure and advocates that favor more privacy both have many legitimate arguments and concerns. This article argues that when viewed in the context of contemporary capital markets, the enhanced role of the executive, and the modern media, additional disclosure from executives about material, private matters is desirable. In support of this argument, this article proposes a principle-based approach for executive disclosure that affords companies and executives reasonable deference on what to disclose and how to disclose it, while simultaneously …